Options update for May 6...Stop breakin' down!
56 MM shares of Bre-X today. What a story. I almost admire whoever put this scam together. I was long Bre-X because I thought no one could salt 16,000+ samples with just the right amount of flake over such a long period. This makes "The Sting" look like child's play. At least I wasn't the only one snookered by this, and I truly feel sorry for those who were long at $15.00+. Anyway, my Torex equity trading computer crashed four times before BXM was halted. I know this was an extreme day, but imagine what another NEP would do, or some heavy tax on the banks, making an entire sector go crazy. The computer system would crash but good. When they halted Bre-X, the system also halted the options on BXM, even though the MMs wanted to keep trading them, since the stock was trading on the ME and Calgary. Another instance of the exchange making us look bad when it wasn't our fault.
The death throes of options trading in BXM was caused by the mistaken belief that investors need a closing sale to establish a loss for options for tax purposes. The buyers are those who were short the options. Anyone who is short an option, no matter how far out of the money, is nuts if they don't buy them back at .01c. I don't say this to build commissions for the brokers, but anything can happen--maybe oil will start gushing out of the holes in the ground.
No stock-specific commentary tonight other than to say I still think Bell is headed lower. For a contrarian view, ask Dave Simmons. I also think the whole market is heading lower, but I'm not married to that idea.
Happy trading.
Porter |
